Labor’s new employment standards explained

New minimum employment conditions that will cover the majority of employees around the country were released by Employment and Workplace Relations Minister Julia Gillard yesterday.

The 10 National Employment Standards (NES) to take effect from 1 January 2010, will become the new minimum safety net for employees of businesses that operate under federal IR laws.

Peter Vitale, principal with CCI Victoria Legal, says there are no big surprises for business in the new standards, but each employer needs to understand how they will be affected.

“Employers need to start planning, if they are not already, to be covered by a national system from the end of 2009 if they are a corporation or otherwise in the national system, and looking at the impact it will have on their business,” he says.

Here is Vitale’s take on the issues employers need to be looking out for in relation to each of the new standards:

1. Standard 38-hour working week

Employees can be required to work a standard 38-hour week plus “reasonable additional hours” each week.

Employers can average the 38-hour requirement over a “specified period” – this is less specific than the old requirement and could make it easier for employers to manage their workforce in shift-based industries such as the resources sector.

Vitale’s view: The NES outlines some specific criteria as to when additional hours will be “reasonable”, such as whether working overtime is usual in the industry, that did not apply under WorkChoices. They probably reflect a more traditional view of when overtime is appropriate than was previously the case.

2. Request for flexible work arrangements

Labor followed through with its promise to give workers the right to request flexible working arrangements from their employer, with employers given the right to refuse such a request on reasonable business grounds.

Only employees that have worked continuously in a job for 12 months are able to make such a request under the new NES.

Vitale’s view: Labor had promised employees won’t have the right to appeal an employer decision to refuse flexible work, but the NES doesn’t say anything about appeals being excluded. We will now need to wait and see if they deal with that issue when they release legislation for Fair Work Australia later this year.

3. More parental leave

Labor’s other new family friendly employment standard gives employees who have babies the right to request an additional 12 months unpaid leave, or for their partner to request a separate 12 month period of leave.

Vitale’s view: Employers can refuse a request for additional parental leave on “reasonable business grounds”. Small businesses in particular need to understand what this means and think about both how they can accommodate employees and what their business needs to function.

4. Annual leave

The annual leave standard does not significantly alter existing arrangements, and has maintained the option for employers and employees to cash out annual leave entitlements.

Vitale’s view: The new standard also retains employer flexibility to direct employees to take annual leave for events like Christmas shut-downs or if they have accrued excessive leave.

5. Personal/carer’s leave and compassionate leave

This standard retains the existing entitlement to 10 days personal/carer’s leave and two days compassionate leave.

6. Community service leave

Overturns the controversial abolition by WorkChoices of the employee entitlement to leave to perform jury duty or work for emergency services.

Employers are obliged to pay employees for up to 10 days jury duty leave at their basic pay rate.

Vitale’s view: Currently only two states make employers pay staff when they perform jury duty, but this standard will extend that requirement across the nation.

7. Long service leave

This NES essentially just preserves long service leave entitlements under existing awards, but leaves open the prospect of wider extension of LSL entitlements if employers and employees seek to do so.

Vitale’s view: There have been questions over whether there should be a single LSL provision across the country that all award employees should have, but that is a debate they’ve tried to avoid with the NES.

8. Public holidays

Consigns the ability of employers and employees to contract away their entitlement to public holiday to the dustbin, but employees can still be asked to work public holidays where reasonable.

Vitale’s view: Employers will need to negotiate with employees if they want them to work on public holidays, remunerate them according to the awards, and listen if they have reasonable grounds for refusing to work.

9. Notice of termination and redundancy pay

This standard preserves well-entrenched practices regarding the requirement to notify employees if they are to be terminated.

There could be some potential for redundancy entitlements to be extended to more employees through the award modernisation process.

Vitale’s view: The Minister has asked the Australian Industrial Relations Commission to create a catch-all award that could extend coverage to businesses that haven’t previously been covered that could include redundancy provisions – employers should maintain a watching brief on this issue.

10. Fair Work information statement

Labor criticised the Howard regime for requiring employers to provide information statements to employers, but now have imposed their own version of the same duty.

Vitale’s view: The Fair Work Australia legislation may include penalties where employers don’t comply with the NES, and that could well include a failure to provide this statement once a year.

Read more about Fair Work Australia and IR laws